Ted Forstmann's Growing Clout In Sports Coming Under Scrutiny

IMG Chair & CEO TED FORSTMANN's "growing clout
in sports has come under scrutiny since he tripped the third rail of
U.S. sports: gambling," according to a sports-section cover story by
Michael McCarthy of USA TODAY. Forstmann was "sued last year by Agate
Printing, a firm owned by ex-golfing buddy JAMES AGATE."
Forstmann "admits to betting on sports through Agate," but he said that
he "quit around 2007, the same year he launched IMG's move into college
athletics by acquiring the Collegiate Licensing Company." The NCAA said
that Forstmann "did not violate any current laws or regulations," but
in December, Forstmann "banned IMG's nearly 3,000 worldwide employees
from making bets on college sports, even March Madness office pools."
Forstmann: "Having been a victim here of this B.S., I didn't want it to
happen again." Forstmann is "by turns defiant and charming, belligerent
and humorous." When talking "about his global expansion plans for IMG,
he becomes expansive and thoughtful," but when the "subject of Agate
comes up, he becomes visibly tense." Forstmann is "indignant anyone
would question his business ethics and frustrated that coverage of the
suit is detracting from what he believes is the real story, namely how
IMG has come out of nowhere the last three years to become one of the
most powerful players in U.S. college sports." Forstmann: "I've taken
this company that was essentially going nowhere, thought they were so
important because they represented TIGER WOODS and
this and that and so on, and this is what is coming out of it. And I
can tell you there are people who still believe that's what IMG is."

TAKING OWNERSHIP: McCarthy notes Forstmann is
"transforming the privately held company in his own image." He "doesn't
like calling it an agency." He "wants IMG to be an owner, not a
middleman brokering deals and getting a fee." Forstmann over the next
year "predicts IMG will post earnings 5-6 times greater than when he
bought it." He said that the company's profits from college sports
"could be bigger than the profits from the rest of IMG put together
within two years." Forstmann said, "College sports is very interesting
because unlike the pro sports, it's not a monopoly. So there's
opportunity to do things. There's a need on the part of the college for
increased revenues, increased abilities to do things. We provide this."
Meanwhile, Forstmann said that the client representation portion that
"defined the old IMG now accounts for only 6% of profits." Forstmann:
"It doesn't mean that I don't think we don't do a good job at it.
Because I think we do. I'm happy to represent [ROGER] FEDERER,
and Woods and all these people. But you can't scale it. I'm not a
sports guy. I'm a deals guy who loves sports." He added, "I'm in a
building mode" (USATODAY.com, 1/12).

TENNIS' PETE ROSE? FANHOUSE.com's Greg Couch wrote
Forstmann is "tennis' Pete Rose." Several sports governing bodies are
"simply buying into Forstmann's extremely hard-to-believe claims that
his sports betting was all in the past." Nothing would "make tennis
happier than to believe that, so the sport closes its eyes really tight
and wishes really, really hard." But "at the same time that he claims
to have stopped, he also defends it by saying there was nothing wrong
with it." Couch: "So which is it?" (FANHOUSE.com, 1/10).